In this episode, we explore how Japanese discount and high-end supermarkets are adapting to rising inflation with innovative solutions.
The latest episode takes viewers on a journey through Japan’s evolving retail landscape. As inflation hits record highs, both discount supermarkets and luxury stores are responding with creative approaches to win over customers. From innovative payment systems to thoughtfully developed products, the episode demonstrates how Japanese retailers are striving to meet the demands of price-conscious consumers while maintaining quality.
The programme’s focus is on TRIAL, a popular supermarket chain that has expanded its reach with 318 stores nationwide, including 57 in the Kanto region. It offers a wide variety of affordable products, drawing customers in with price points such as a 500ml bottle of sparkling lemon water for just 49 yen, and 100 grams of pork strips priced at 99 yen. “It’s cheaper than other stores,” says one shopper, reflecting the sentiment of many who are flocking to TRIAL to find budget-friendly options.
The need for cheaper alternatives is brought on by Japan’s real wages recording a continuous decline over 26 months although this year it has finally grown by 5 per cent. Yet the sharp rise in prices still far outpaces the salaries of everyday people.
One key factor driving TRIAL’s success is its use of in-house developed technology. The store’s advanced shopping carts allow customers to scan and check out items without waiting in line. This self-service cart system, coupled with a prepaid card, has drastically reduced the need for staff and long queues. It has also developed facial recognition payment systems that offer a seamless shopping experience. As one mother notes, “Having kids often leaves your hands full, so it’s really convenient to just use your face for payments without needing to do anything else.” As a result, labour costs have been cut in half, which in turn allows TRIAL to pass the savings on to its customers.
The episode also highlights how TRIAL’s parent company is poised to continue its growth, despite the inflationary pressure. While sales are exceeding 717.9 billion yen annually, the company’s director, Hiroyuki Nagata is still exploring new opportunities. “We want to continuously develop formats to keep pace with changing times,” he says. Nagata’s strategy involves opening smaller, urban-focused stores like TRIAL GO, a new concept designed for city living. These stores, about 1/30th the size of a traditional supermarket, are tailored to meet the needs of solo urban dwellers, university students, and young professionals.
A pivotal figure in this retail revolution is Takara Hiroishi, who heads TRIAL’s new business strategy. The 34-year-old University of Tokyo graduate with a background in marketing is spearheading the development of TRIAL GO. The episode shows him navigating the competitive landscape of Fukuoka City, where TRIAL GO’s compact 138.8 square metre store is located in a highly competitive area between a major convenience store and a bento chain.
One highlight of the episode is a behind-the-scenes look at product development led by Osamu Otsuka, the head of food development at TRIAL. Otsuka, a former Japanese cuisine chef, is tasked with creating new ready-to-eat products that cater to the store’s clientele. In one segment, viewers see Otsuka perfecting a microwaveable version of bulgogi, a popular Korean-style dish, using imported beef. Priced between 199 to 299 yen, the bulgogi is designed to offer convenience without sacrificing quality. Otsuka says, “We can’t compromise on quality just because it’s cheap.” His dedication to maintaining high standards is evident as he tackles challenges, such as ensuring that the meat cooks evenly without becoming overdone in the microwave.
In addition to affordable meals, TRIAL is also expanding its range of baked goods, with a pastry contest bringing forth unique offerings like mentaiko-filled cream puffs. The judges, including Hiroishi himself, are impressed by the creativity and depth of flavours. One contestant’s creation, a milk mousse-filled cream puff, stands out for its “amazing milk” and rich taste.
While discount stores like TRIAL are finding innovative ways to cut costs and deliver value, the episode also casts a light on how high-end stores are grappling with inflation. Kuze Fuku, a luxury food store with 159 locations across Japan, has seen a drop in customers due to rising prices. Despite raising prices over the last two years, Kuze Fuku’s president, Ryota Kuze, acknowledges that the strategy backfired. In December of last year, the store began lowering prices by an average of 15 per cent on select items in an effort to regain its customer base. As Kuze says, “It is only natural for people to pay more attention to prices than ever before.” The challenge for high-end stores is to balance premium quality with affordability, a task Kuze Fuku is tackling through innovative product lines like “too-good-to-waste” items, including grilled chicken made from parts that would otherwise be discarded.
This episode captures the ingenuity and resilience of Japan’s retail industry as it faces unprecedented challenges. From high-tech innovations to thoughtfully crafted products, the episode offers a glimpse into how retailers are evolving to meet the demands of a new era while maintaining their unique appeal. Whether it’s budget-conscious shoppers or those seeking luxury, the future of retail in Japan is clearly being shaped by a dynamic mix of tradition and innovation.
Source: CNA
